Transcript D2-Nancy-Turn-special-situations-into-cash1.ppt

Turn Special Situations
Into Cash
Nancy Zambell
Editor, Investment Digest and Dividend
Digest
www.DickDavis.com
[email protected]
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@NancyZambell
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Special Situation Catalysts
• Mergers & Acquisitions
• Initial Public Offerings (IPOs)
• Spin-offs
• Stock Buybacks
• Special Dividends
• Private Equity Buyouts
• Turnarounds
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Mergers & Acquisitions
Company
Acquirer
HJ Heinz
Berkshire-Hathaway 20%
Virgin Media
Liberty Global
24%
Elan
Perrigo
11%
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Premium
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Initial Public Offerings
Company
Symbol
Return
Brixmoor Prop
BRX 10/13
13%
Empire St Rlty
ESRT 10/13
17%
Facebook
FB
5/12
56%
Phillips 66
PSX 4/12
70%
HCA
HCA 3/11
52%
Marathon
MPC 6/11
97%
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Spin-offs
Company
S-O
Return
Kraft
9/12
316%
Lumos
10/11
69%
Huntington Ingalls
10/11
70%
Motorola Mobility
8/11
63%
(after Google bought it)
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Stock Buybacks
Company
Symbol
Rise
Viacom
VIA
11%
DirecTV
DTV
21%
Home Depot
HD
9%
Apple
AAPL
14%
Pfizer
PFE
7%
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Special Dividends
Company
Symbol SD
Rise
CVR
CVI
$6.50
40%
US Cellular USM
$5.75
10%
Inteliquent IQNT
$1.25
104%
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Stock Splits
Company
Symbol
Rise
Apple (7-1)
AAPL
14%
Google (2-1)
GOOG
-0.4%
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Private Equity Buyouts
Company
Acquirer
Premium
BMC
Bain Capital
29%
Websense
Vista Equity
29%
Natl Fin Ptnrs
Madison Dearborn
8%
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Turnarounds
Company
Symbol
Return
Ford
F
826%
Hewlett-Packard HPQ
117%
Wendy’s
88%
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Signals of Catalysts
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Rise in Institutional Interest
Increase in Volume
Sector/Industry Growth
Market Share Leadership
Large Cash Positions
Change in Company Focus
Need for Cash Influx
New Management
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Evaluating the Potential
• Historic P/Es
• Debt
• Cash Flow
• Institutional Interest
• Insider Interest
• Earnings and Revenue Triggers
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Average Debt May 2014
Industry
LTD/E
Mortgage REITS
228%
Trucking
27%
Medical Equipment
19%
Software
7%
Hardware
28%
Regional Banks
26%
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Search for Companies with
Plenty of Cash
A Company Flush with Cash has
More Flexibility in Troubled Times
– Ability to Meet Interest Payments Easily
– Allows Opportunities to Pick Up Bargain
Companies that Don’t have the Financial
Strength to Pull Through a Crisis
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Taking the Plunge
Consider
• Portfolio Diversification—Market
Cap, Industry
• Size of Portfolio/Position
• Holding Period
• Target Price
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Stocks to Watch
Company
Yield
• Sequential Brands (SQBG)n/a
• Cowen Group (COWN)
n/a
• Hercules Tech Gr Cap (HTGC) 8.0%
• Hersha Hospitality Trust (HT)
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3.7%
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